Risk Management Software
Get the best risk management software for your business. Compare product reviews, pricing below. Read our buyer’s guide for more help.
Risk Management Software Buyer’s Guide
Every company manages risk. It’s intuitive and automatic to prepare for the worst, like natural disasters, pandemics, and worker incidents. In fact, taking these risk factors into account is part of making even the simplest business decision. But at an enterprise level, an unstructured approach to risk management is–well, risky. Risk management software provides a better alternative. It does so by helping you systematically recognize and address business threats, so negative outcomes can be minimized and avoided.
What is Risk Management Software?
Risk management software helps you quantify, minimize, mitigate, and build contingencies to deal with risks. The right risk management solution will scale to the complexity of your business processes without unnecessarily bogging down your decision making.
When you purchase a risk management software package, what you are really acquiring is a system of coordination and optimization for reducing the chance of harm to your organization’s earnings potential. Fundamentally, this begins with identifying and categorizing risk. As transparency of the risk profile improves, so too does the effectiveness of treating risk. A complete risk management software suite not only provides the tools to plan for risk, but those needed to manage risk incident responses.
Corporate risk arises in many forms. Every company’s risk profile differs. Getting a grip on risk requires flexibility in accounting for risk attributes. Strong enterprise risk management software should track risk characteristics across a number of dimensions, such as:
- Type: security, quality, compliance, competition, and others.
- Origin: employees, customers, vendors, and business partners.
- Ownership: department, location, and responsible stakeholder.
Note: Risk management sometimes refers to trade risk management (TRM) practices. Software for ETRM reviews risk factors for making financial investments. Here, risk management software refers covers accident identification and prevention.
Functionalities for All Phases of the Risk Management Life-Cycle
Breaking down the risk management life-cycle provides a basis to understand what’s available in the software tools and how they can differ from each other.
| Feature | Description |
|---|---|
| Risk identification | In order to treat risk, it must be identified. Risk management platforms offer a variety of tools designed to help with risk capture. Common tools include brainstorming tools like concept maps, interview, survey, and polling applications, as well as process modeling and story-boarding interfaces. Risk identification software is not limited to user-generated risk identification tools, though. Pre-created taxonomies and risk registers that offer libraries of selectable risks are becoming increasingly more popular. Risk registers can provide assistance in more quickly tracking risks to a more granular level. |
| Risk assessment and assignment | Analyzing and assessing risk is essentially a matter of identifying of probability and impact. Probability is generally expressed as a percentage chance of an event occurring, while the optimum approach of assessing impact relies on assigning a quantifiable dollar-based cost to an event occurring. Access to historical information about impact calculations, as well as access to the underlying financial data maintained in core ERP system. or accounting modules can help create accurate quantification of risk impacts. Robust reporting tools are essential to risk assessment. Risk assignment typically coincides with the assessment phase and risk management tools need to include communication tools to effectively relate risk assignments to responsible owners. |
| Risk prioritization | Reporting and dashboard tools for displaying risk prioritizations provide a means of ranking risks, allowing your company to address the most significant risks first. Visualization tools can be particularly beneficial in managing risk prioritization. Risk based heat maps and magic quadrant type displays for displaying risk prioritizations are common tools. |
| Risk response planning | There are four fundamental approaches to managing risk: avoid, prevent, mitigate, and transfer. Risk response planning tools allow for the identification of risk treatment strategies. Detailed risk response planning often requires developing more in-depth processes and procedures. Document management functionality can come into play in terms of databasing risk response strategies and providing a means of communicating risk response plans. Sophisticated programs can also support and track approvals and authorizations of specific risk response strategies. |
| Risk treatment and incident management | No risk management software is complete without capabilities to coordinate the business actions taken to either avoid or prevent risks or to address them when they occur. Risk treatment and incident management tools can involve scheduling functionality, communication tools, and tracking software for identifying where in the treatment process risk incidents are and the results of the actions taken. |
Benefits of Risk Management Software
With improved risk management, organizations can directly lower operational overhead. The right approach to managing risk can help your company:
- Prepare for large and small-scale incidents
- Avoid lawsuits, fines, and penalties via regulatory compliance,
- Reduce insurance requirements by demonstrating adherence to risk reduction standards,
- Eliminate inefficiencies in internal processes, and
- Improve credit ratings.
Similarly, risk management software promotes profitability by improving customer satisfaction and retention:
- Decrease instances of sub-standard service, sales, and support by identifying and addressing threats to each.
- Plan for delivery of service interruptions.
- Identify competitive conditions that may lead to reduced market appetite for goods and services.
Examples of Real-World Use Cases
Small companies to large enterprise businesses need risk management software no matter what industry they’re in. Natural disasters, supply shortages, and pandemics don’t discriminate. Here are some real-world use cases we’ve seen:
- A civil construction company that wants to manage accountability for their workers and track safety at jobs sites with reporting for daily toolbox talks, job hazards, incidents, and inspections.
- A financial consulting firm that needs software that keeps track of Risk Management Association standards that provides risk analysis by the NAICS code for its 5-year performance & risk analysis forecasts for start-ups.
- Healthcare organizations that want to improve compliance and risk analysis management processes, and need a solution that has regulatory compliance management to stay in line with HIPAA.
- A made-to-stock manufacturer that needs to ensure they meet ISO/TS certification standards.
- A government organization needing a solution that provides complete visibility into their audit processes and provides metrics for better risk management and assured compliance.
- A collection agency that needs to stay on top of compliance requirements and risk management, security and data access, and document compliance.
- An oil and gas industry company that needs to analyze the risks associated with their projects.
Common Pain Points
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Budgeting for risk management software: According to CSO’s article, “Woe is IT, the Pain of Risk Management”, 41% of respondents listed budget as the biggest threat to security management and 81% stated less than ¼ of their IT budget is used for security management. Not allocating enough resources to risk management will leave your company in danger of larger security threats.
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Meeting regulatory compliances: There are many regulatory compliance statutes for business to be mindful of, whether it’s for data and cybersecurity or quality control. The right risk management software will ensure your processes keep your business in line with regulatory compliances that are relevant to your industry including, but not limited to, HIPAA, GDPR, ISO 9000, OSHA, FDA, and FERC.
Industry Trends in Risk Management Tech
Machine Learning
Machine learning will be used to prevent cybersecurity attacks by detecting new breaches and evaluating attack methods to quickly adapt security processes. O’Reilly Media, Inc. surveyed 11,000 data specialists about the use of machine learning in their organizations. The survey revealed that 49% are exploring adopting machine learning, 36% have been using machine learning models for the last 2 years, and 15% have been using machine learning models for the last 5 years.
Increasing Cybersecurity Threats
Many large businesses saw more data breaches and cybersecurity attacks in recent years.
Symantec’s 2019 Internet Security Threat Report found:
- Ransomware attacks against enterprises rose 12%
- Supply chain attacks increased by 78%
- 4,800 average websites per month were compromised with formjacking code, allowing cybercriminals to steal personal and credit card details on checkout pages
As cybersecurity threats have been increasing, legislations have been passed around the world to increase the protection of data and consumer privacy. Risk management software will ensure your company is compliant with local, national, and international regulations for data and cybersecurity like the EU’s General Data Protection Regulation (GDPR) that took effect in May 2018 and the California Consumer Privacy Act (CCPA) that will go into effect January 1st, 2020.
Bring Your Own Devices (BYOD)
More businesses are having their employees use personal computers, laptops, smartphones, and other mobile devices for work. Syntonic surveyed 409 C-level executives from companies that have over 100 employees about the use of personal devices being used for work. The survey found that 87% of companies depend on their employee’s to be able to access business apps from their own smartphones, 77% of respondents expect personal smartphone use for work to increase within the next 6-12 months.
If you plan to adopt a BYOD policy, you need to be aware of and manage compliances associated with it.
For example, if your employees are non-exempt and are checking their work-related emails after hours at home, they may be entitled to overtime pay in accordance with the Fair Labor Standards Act (FLSA). You also need to have a plan in place in case a mobile device is lost or stolen that notifies the applicable parties if their data was breached if personally identifiable information was downloaded to the device.
Read our article to learn more about risks associated with personal device usage and cloud storage.
Taking the Next Steps
Risk management software offers an opportunity for organizations to improve both the transparency and accountability related to risk identification and the effectiveness of mitigating negative outcomes. But the variety of risk management options on the market can be daunting for companies looking to understand which option is the most relevant.
If you are at the point where you are ready to find which risk management software options are right for you, we can help. Through a brief phone call, our software specialists will look to better understand your business and software needs to help you locate a handful of solutions suited for your specific requirements. Get started today!